Monday, February 4, 2013

Debunking the New Deal Argument (Part 1)

Liberals seem to have two big arguments to back up their messes of policies: the Clinton Argument, which we debunked here on Biblical Conservatism nearly two years ago, and the New Deal.

The claim from liberals is that the New Deal is what got us out of the Great Depression. Somehow, they claim, all the government spending in the New Deal created a recovery.

History tells a different story. To what degree the unemployment dropped due to the New Deal it was a prop up, caused my government make-work agencies like the Public Works Administration.

Now, given the choice, I'll pick the government hiring people to build bridges over the handouts of the Welfare State. However, once you take away these government make-work programs you'll find unemployment at it's lowest of 17.9%.

You'll notice that unemployment began it's genuine and permanent recovery in 1939. Gee, what happened then? Oh, right, the United States started selling war supplies to France and Great Britain. Then you look at the difference betwen 1941 and 1942.

In fact, many economists surmise that the New Deal's massive taxes may have slowed the recovery, thanks to such policies as a LOWEST top marginal income tax rate as 63% (the highest was a whopping 94%). Who knew that taking tons of money from those who produce might stop them from producing. Shocker.

Thursday, we're going to talk about a second aspect of the New Deal Argument that other Keynesian argue. In short, they argue that sure, it was World War II that got us out of the Great Depression, but the spending during the war was Military Keynesianism therefore it was a success of Keynesian Economics.